Written by The Banking Post
Yields on short-term Treasury bills (T-bills)# T-bill Yields Dip as Banks Park Excess Liquidity in Government Instruments
Yields on short-term Treasury bills (T-bills) declined on Thursday declined on Thursday amid growing liquidity amid growing liquidity inflows in the banking inflows in the banking sector, prompting sector, prompting increased participation increased participation in government securities in government securities.
Auction.
Auction Results Snapshot Results Snapshot
- **91-Day T-b
- 91-Day T-bills: Cut-off yieldills**: Cut-off yield fell to 11.97% from fell to 11.97% from 12.09%
- **182 12.09%
- 182-Day T-bills: Decl-Day T-bills**: Declined to 11.96% fromined to 11.96% from 12.00%
- **364 12.00%
- 364-Day T-bills: Dro-Day T-bills**: Dropped to 11.74% frompped to 11.74% from 12.03%
The easing 12.03%
The easing rates signal banks rates signal banks’ preference for risk-free investment options, particularly as their liquidity positions improve.
Central Bank View
“Most’ preference for risk-free investment options, particularly as their liquidity positions improve.
Central Bank View
“Most banks are channel banks are channeling surplus funds into governmenting surplus funds into government securities,” a senior securities,” a senior official at Bangladesh official at Bangladesh Bank told *The Financial Bank told *The Financial Express. He added Express. He added that the downward that the downward trend in T-bill trend in T-bill yields may persist yields may persist in the coming weeks in the coming weeks, aligning with liquidity, aligning with liquidity dynamics.
dynamics.
Government Borrow## Government Borrowing Update
On theing Update
On the same day, the government same day, the government raised **Tk 60 billion raised *Tk 60 billion* by issuing T-b** by issuing T-bills across threeills across three maturities to support maturities to support budget financing budget financing needs. Bangladesh needs. Bangladesh Bank conducts these Bank conducts these auctions on behalf auctions on behalf of the government of the government to adjust public to adjust public borrowing via the borrowing via the banking system.
banking system.
Market Instruments—
Market Instruments Overview
- ** Overview
- T-bill maturitiesT-bill maturities: 14-day, 91-day**: 14-day, 91-day, 182-day, 364-day
- **Long-term, 182-day, 364-day
- Long-term bonds: 2-year bonds**: 2-year, 5-year, 10-year, 5-year, 10-year, 15-year, and 20-year government bonds also actively, 15-year, and 20-year government bonds also actively traded
The latest traded
The latest dip in yields reinforces dip in yields reinforces continued appetite continued appetite for safe assets for safe assets as banks look to as banks look to deploy excess funds deploy excess funds while navigating while navigating an evolving interest an evolving interest-rate landscape.-rate landscape.
